Excerpts from a presentation at the H+ Conference, Harvard University June 13, 2010

Building a Services Market for the Transhuman Era By Tony Greenberg, Alex Veytsel & Eric Pulier

One man, one army. So we’re going to count down what we do. I’m honored to be hanging out here with (Rob) Tercek, (Alex) Lightman and a bunch of other buddies. When Alex said, “Come to Harvard,” I said, “I better bring some backup.” I called some brilliant guys that I know.

Eric Pulier built dozens of companies, raised hundreds of millions of dollars and exited multiple times. He’s a trendsetter in IT.

His current companies are ServiceMesh, DeskTone, and so on. He’s really changed the game every day. Thank you very much for being here.

Alex Veytsel works with my companies, RampRate and Taste and he’s my personal yoda. Thank you, Alex, for being here.

We call our presentation, “Boiling the Human: Convenience and Confusion on the Path to the Singularity.”

So, how do service markets work and how do they build up and stuff? Basic challenges: “Tomorrow is becoming tomorrow faster than yesterday is becoming today.“ The frequency of change is changing. We have to catch up as we rocket towards Singularity.

New laws are fueling technology development, which is growing exponentially, driving our growth in a virtuous cycle. But there’s a serious disconnect.

When we talk about today, we have a lot that needs to change. We need tax reform changes. We need to change how companies deal with our personal private data. We’re facing a time when we have more choice but much less freedom control. Yet we need to better prioritize our fears based on our real risks.

Unfortunately, the reptilian bits of our brain still rule far too much of our behavior.

We have to harness the decision-making processes that drive our path and our future. We’ve learned to work around the physical limits of a shrinking transistor and higher storage capacities. Now we have to work around other limits, which are in us, not our technology. A humane Singularity is still possible if we recognize the limits and the obstacles and begin to work around them.

We’re entering into the Land of the Lost, which is what I call the difference between what we’re capable of achieving or evolving to and, let’s just say, all the bad stuff, which can come from exploitative business models.

What are these exploitative business models? We’ve entered the world of Bernie Madoff’s Law: “Anywhere profit can be made, it will be made.”

So what does that mean? It means that profit has driven business models to greater and greater effectiveness and efficiency, so much so that these businesses are now often evolved far beyond the average human’s ability to deal with it.

We have 25 years to fix the problems created by Madoff’s Law. What can we correct now to head off the worst implications of Madoff’s law in the future?

Our big concern is that we will do nothing, or not nearly enough, in the next quarter century, allowing Madoff’s law to thrive and shape the experience we all have with technologies that far outstrip our ability to manage them.

When you talk about growing on the exponential curve of technology development, the implications are very exciting. There’s Moore’s law, nanotech advancements, advancements in nanotech and biology.

But what about all the things that are not advancing exponentially, what about step functions, and so on? These include our basic instincts, our human biology. So, our basic instincts could be easily manipulated in light of the rapid change sweeping up on us.

Rob (Tercek) was saying why it’s important to focus on today, to kind of ground it, instead of just riding the exponential curve. In the next 12 minutes or so that we have, we want to really ground what’s happening in the phenomena happening today.

The Land of the Lost and the exploitation that’s possible within that, we’re seeing signs of that, and it’s gradually creeping up on us in lots of different ways.

We speak in terms of boiling the frog, or in our case, boiling the human. You probably know the story. If you want to cook a frog, you put it in cool water, and slowly turn the heat up. The reality is that if the heat rises too fast, the frog jumps out to avoid being boiled.

The same thing may be happening for us as humans as we’re trying to evolve to transhumans. The heat is beginning to rise.

Let’s say that we’re talking about issues such as global warming, about the economic problems of the past two years. Now, we’re faced with many things that turn up the temperature, like privacy laws that can’t keep up with fast-changing new online services and companies.

Do we end up boiling the frog, making those cuisses de grenouille? Which, I can’t pronounce.

So, as we take a look at drawing the line, we’re going to look at yesterday’s revolutions and rely on the strength we developed there.

It’s really important to look at where we’re coming from.

Once there was no email, no browsers, where connectivity was fleeting. Then this all began changing extraordinarily rapidly, in a series of revolutions in the way information was exchanged, whether it was people-to-people, information-to-information, or people-to-information revolutions.

Each time, there was an innovation, and each time, everyone laughed at the business model, and each time, everyone doubted it would ever be fundamentally important.

That response has allowed things to sneak up on us. It has allowed the temperature to rise, as we all gradually get more and more cooked, as we move from browsers to exponentially more powerful and direct connections between people.

The phenomenon of sharing is sneaking up on us now.

When you talk about sharing, you have to talk about the speed at which information is flowing between individuals and systems.

There are a couple of red herrings that are allowing people to become complacent. What’s the cost to actually move information around? If you look at that, and you believe that those are gaining factors, then it allows your brain to become complacent, and stay in that boiling pot.

There are other changes that are sneaking up on us, like the plummeting cost of bandwidth, the plummeting cost of storage and an explosion in access to information.

Everyone in this room probably knows Moore’s law intimately, and Metcalfe’s law too.

More recently, we’ve seen the rise of Zuckerberg’s law, which says that the amount of information shared between people doubles every 12 to 18 months.

And now we have Eric Pulier’s law, which says the time and cost to launch a venture that reaches 100 million people halves every 12 to 18 months.

The Harvard types around here are likely very proud of Facebook, which was founded in one of the dorms on campus and now has 500 million accounts.

Zynga, the online game company, has exploded in size and revenues in the last 6 months, and now Foursquare is taking off like mad, riding the revolution in location-based applications.

Tens or hundreds of millions of people have quickly adopted all these companies as a crucial part of their everyday lives. But the default options on these companies’ products are at the heart of our discussion about boiling the human.

This is where the Land of Lost, with its exploitative business models, enters the fray.

All of a sudden, privacy becomes a process, and one that needs to be constantly managed. You probably all spent X number of hours just to cancel your AOL account. The default is that you’re stuck forever with AOL and can’t leave them.

This is happening with lots of other companies too, as they fiddle with privacy settings and defaults and change the way they share your data and so on. Little by little everything keeps getting changed. Little by little, the heat gets turned up.

If you think back to Amazon, everyone laughed at its original business model. Critics said the number of people willing to buy something online with a credit would never rise high enough for Amazon to make money. But then people became okay with doing credit-card transactions online.

The change in mindset about buying online from Amazon proved that convenience is the single most powerful and dangerous driver in this gradual shift in what we find acceptable It’s a textbook example of how you can mitigate an issue that seems intractable until it gets to a point where it doesn’t seem like a problem. You cannot govern or mandate these shifts, you cannot tell people what to do, because they just won’t do it.

But if you make the convenient solution what you’d like consumers to use, behavior will change, even if it’s not necessarily in a consumer’s best interest in the long term, or with every possible transaction or company. This is what’s happening in the world today.

Google made itself the most convenient place to find all kinds of information. In fact, their mission is to “organize the world’s information.” Why? So they can wrap more and more perfectly targeted, highly profitable ads around the information you’re trying to find.

Then Facebook came out. It became popular because of what MySpace and Friendster. Facebook felt more private, more controlled, less chaotic.

As many of you know, Facebook started here on the Harvard campus. And then Facebook expanded to other campuses, and it still felt like you were in a zone that was separate and safe from the rest of the world. Users got a feeling of comfort when they were on Facebook.

And then they started to sell the data. The constantly changing and incredibly complex privacy settings became dangerous. Facebook now has more than 500 million users, despite the complaints of some, including the profile suicides by some prominent tech bloggers.

Twitter has had the same arc, first as a recipient of some ridicule then increasing acceptance then near omnipresence.

Now we’re watching the same thing happen to Foursquare, which is perhaps the final step, where your actual physical location is being broadcast to anyone paying attention.

Each of these programs is turning up the heat on us, notching up what we expose to others one additional level at a time. The minute we release our powers and our responsibilities, companies will take advantage.

Innovation. Some markets are wildly successful. But the human brain can not quite catch up with technological innovation.

In the 1940s, the head of IBM was misquoted about the potential size of the market for computers, at just five worldwide. Now, of course, there’s a PC, or six, in every home, and a smart phone in every pocket. Tony has four in his man purse right now.

This is how innovation will work. You think of an idea, put it out there and then sometimes it explodes beyond anything in your imagination.

Back in the 1960s, the other promise of science fiction was that everyone was going to have a flying car. In 1985, we even got a definite timeline, thanks to Back to the Future. It was arriving in 2015, where we’re going we don’t need roads.

So what did we get: Thirteen versions of the Canyonero, Krusty the Klown’s SUV that’s two lanes wide and gets a few gallons to the mile.

Innovation got derailed because of the way we structured the businesses and profit motives.

The first and simplest form of failure was a failure of innovation, where business models didn’t catch up to the pace of technological innovation. You don’t even see what you’re missing.

The business model can outstrip the human brain’s ability to withstand the assault, allowing exploitation to creep into our lives.

And then there’s the paradox of choice. As we get more choices, we get less happy, we get stuck in decision paralysis. This could become exploitative as we run away from choice and into conformity.

Fleeing too many choices, we go for the easy thing. We run into specific lowbrow, low class, lowest-common-denominator solutions. Then we get stuck there because we’re too afraid of everything else that is available to us.

We have a slide here that shows 32 companies. What do they have in common? They were the nominees for the worst companies in America. Of those 32, 21 are services companies, including 3 of the 4 finalists and the eventual winner.

So what does all this have to do with today’s conference. A lot. Transhumanism is a services market.

Nearly everything that would be needed to make Transhumanism possible would be a service: Virtual reality, uploading, cryonics, they all would have the same heritage in terms of a business model.

Even nanotech is a service, because it’s likely to be administered on a by-the-drink basis, because we can’t probably hand out nanotech kits because of security concerns.

It’s a services model, and it’s not always the services model that is predicated on managing costs better. Think back to your last interaction with your credit-card company, insurance company or cable ISP.

What happens when you’re dealing with a company that can hold your brain hostage when there’s a billing dispute? That’s exploitative.

What about the people who are out to do harm? For instance, did you know that Twitter accounts are worth more to cybercriminals than plain old credit card numbers? The cybergangs can use a trusted Twitter account to spam lots of people and make some real money.

We’ve looked at the good, the bad, and the horrible. Now let’s figure out how to avoid locking our future into something terrible like the QWERTY keyboard. The thought leaders and investors will shape how tomorrow looks.

There are a lot of fake cures out there. There’s fearmongering and demagoguery, like “I’m not going to take that, and I’m going to shut off my Facebook account.”

In California’s primary election for Attorney General, one of the decisive campaign issues was that one candidate had designed the Facebook privacy policy. People are aware of this, and they know it’s a problem.

It had seemed like a good campaign issue for the candidate a year ago, but by this spring, it had become dangerous to raise the topic, and there was nothing systematic in place to change the policy.

You feel like someone is doing something, but in reality, the fact is nobody is doing anything about it. There’s just a lot of ado about nothing. We have to step forward and put something in place.

One statement as to why this is so important: If you really think about how much private information there is available to the public today, and growing issues with identity theft, it’s a huge problem.

And it’s only going to grow, as the black market for Facebook and Twitter accounts takes advantage of the fact that people are generally wired to trust anyone within a certain degree of separation on their social graph.

How do we reshape the market? Capital of tomorrow. What is the scorecard? What are the libertarians doing? We have many potential solutions: More innovation. Regulation. Tax cuts, government regulation. Opponents of regulation argue that it’s most often co-opted by the people it is supposed to regulate. In fact, that argument is used to move the line of business innovation down. That’s how we get stuck with the failure to innovate.

Craig Newmark, who founded Craig’s List, suggests another way to innovate. If you want to benefit humanity, and not just line your pockets, give people an incentive to behave. If you don’t, dictators will arise and you will get Facebook.

So we’re going to list our big ideas:

Create a Singularity Bill of Rights for humans and machines.

Create a Singularity Stock Exchange. The SSE rates companies against the expectations codified in the Singularity Bill of Rights. Capture the conscious capitalist!

You have certain religious movements, and they boycott companies that don’t ascribe to their basic principles. There are issues even more basic to the future of humanity, such things as the profit motive, the planet, the basic tenets of economics of transhumanism.

It has to come together to become a Bill of Rights of things we believe in, a ranking against companies, created and updated in real time. If we can have a ranking where the stocks of these companies are going up and down, based on their adherence to these principles, and through a little crowd-sourcing and voodoo to make it hard to game the system, we can make a correlation between their score and the actual stock price. That will create an incentive for companies to behave, not exploit.

Divorce political organization from geography. It’s already happened to technology and business, so why not politics too? The idea is to model more goods into the market, including political goods.

You could have joint citizenship with people across the world in political structures that stretch beyond the artificial boundaries of current nation states. So, Hillary Clinton didn’t win the nomination, but she still can be your nation’s president.

If we get market structures right, we can prevent businesses and politics from being exploitative. Then we can become free of geographic boundaries. How do we get there?

How do we move to the services market without the salesmanship and exploitation? I’ve been trying to eliminate the sales process.

If there’s true value exchange based on value and understanding. We create awareness, expectations, accountability and so on.

What are the boundaries on turning off the power for Southern California? The software that meshes people and tech, our possibility of creating and understanding new service markets are critical for us at this time.

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